Question: Bond Features Maturity (years) = 5 Face Value = $1,000 Starting Interest Rate 6.00% Coupon Rate = 4.00% Coupon dates (Annual) If interest rates change

Bond Features

Maturity (years) =	5
Face Value =	$1,000
Starting Interest Rate	6.00%
Coupon Rate =	4.00%
Coupon dates (Annual)

If interest rates change from 6.00% to 3.00% immediately after you buy the bond today (and stay at the new interest rate), what is the price effect in year 3 ?

$28.58

$56.36

$28.86

$0.00

$55.80

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